The Chinese government’s media arm, the Xinhua News Agency, has defended regulators’ recent decision to outlaw token sales, or ICOs, and the voluntary closure of bitcoin exchanges that followed.

Heavily critical of cryptocurrency exchanges, Xinhua said they had become a favourite among criminals across the world in an article today. Exchanges, it continued, are known to have “concocted pyramid schemes” and “engaged in illegal activities” – criminal activity “disguised as scientific and technological innovation.”

The solution? These entities must be met with “iron fist governance,” according to the news agency, which also praised authorities’ “zero tolerance” to the financial risks and illicit activities.

The article follows a statement by authorities in early September, which prohibited the sale of blockchain tokens as a method of fundraising. In the following month, a number of exchanges, citing the statement, announced they would voluntarily close their doors.

Xinhua argued that, even following the crackdown, there are still many “regulatory vacuums” that authorities need to address, in part because of the global use of cryptocurrencies.

Solutions suggested by the agency – which is often considered the voice of the government – include strengthening existing regulations and establishing a full regulatory framework for exchanges with specific requirements, such as a cap on large volume trading, ID verification, and know-your-customer and anti-money laundry procedures.

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